10-Q

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 000-52635

ACCELERIZE INC.

(Exact name of registrant as specified in its charter)

Delaware	20-3858769
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

20411 SW BIRCH STREET, SUITE 250

NEWPORT BEACH

CALIFORNIA 92660

 (Address of principal executive offices)

(949) 515 2141

 (Registrant’s Telephone Number, including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes [X]  No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X]  No [  ]

Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No [X]

The number of shares outstanding of the registrant’s Common Stock, $0.001 par value per share, as of August 11, 2015, was 62,914,540.

When used in this quarterly report, the terms “Accelerize,” “the Company,” “we,” “our,” and “us” refer to Accelerize Inc., a Delaware corporation.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This quarterly report on Form 10-Q contains certain forward-looking statements. Forward-looking statements may include our statements regarding our goals, beliefs, strategies, objectives, plans, including product and service developments, future financial conditions, results or projections or current expectations. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. For example, when we discuss our expectations that our revenues will increase in 2015, our expansion plans, our new products, our intentions to grow revenues by investing in sales and marketing efforts, and our spending on research and development, training and support personnel, we are using forward-looking statements. These statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. These factors include, but are not limited to, our ability to implement our strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. The business and operations of Accelerize Inc. are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under “Item 1A. Risk Factors” in our annual report on Form 10-K as filed with the Securities and Exchange Commission, or the SEC, on March 19, 2015 and in this report. Readers are also urged to carefully review and consider the various disclosures we have made in this report and in our annual report on Form 10-K.

ACCELERIZE INC.

INDEX

		Page
PART I - FINANCIAL INFORMATION:		1
Item 1.	Financial Statements (Unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Position And Results of Operations	14
Item 4.	Controls and Procedures	21
PART II - OTHER INFORMATION:		22
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	23
Item 6.	Exhibits	23
SIGNATURES		24

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ACCELERIZE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
ASSETS	2015			2014
	(Unaudited)
Current Assets:
Cash	$	403,674		$	1,130,667
Accounts receivable, net of allowance for bad debt of $5,364 and $212,113, respectively		2,286,592			1,749,566
Prepaid expenses and other assets		402,846			204,268
Total current assets		3,093,112			3,084,501
Property and equipment, net of accumulated depreciation of $1,322,431 and $826,802, respectively		1,450,304			1,424,858
Customer relationships, net of accumulated amortization of $1,000,000 and $703,704, respectively		-			296,296
Deferred financing costs, net of accumulated amortization of $37,899 and $19,317, respectively		59,957			37,750
Other assets		134,564			132,988
Total assets	$	4,737,937		$	4,976,393
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses	$	1,689,693		$	1,202,495
Deferred revenues		57,134			206,475
Other current liabilities		2,310			-
Total current liabilities		1,749,137			1,408,970
Line of credit		4,500,000			2,900,000
Total liabilities		6,249,137			4,308,970
Commitments and contingencies
Stockholders' Equity (Deficit):
Common stock; $0.001 par value; 100,000,000 shares authorized; 62,837,351 and 62,816,554 shares issued and outstanding, respectively		62,836			62,815
Additional paid-in capital		20,791,623			19,618,153
Accumulated deficit		(22,356,716	)		(19,002,574	)
Accumulated other comprehensive loss		(8,943	)		(10,971	)
Total stockholders’ equity (deficit)		(1,511,200	)		667,423
Total liabilities and stockholders’ equity (deficit)	$	4,737,937		$	4,976,393

 See Notes to Unaudited Condensed Consolidated Financial Statements.  

1

 ACCELERIZE INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three-month periods ended						Six-month periods ended
	June 30,						June 30,
	2015			2014			2015			2014
Revenues:	$	5,465,824		$	3,906,409		$	10,665,486		$	7,333,606
Cost of revenue		1,591,345			1,049,668			2,909,111			1,838,767
Gross profit		3,874,479			2,856,741			7,756,375			5,494,839
Operating expenses:
Research and development		1,326,410			600,259			2,201,792			1,177,045
Sales and marketing		1,915,053			1,400,559			4,048,977			3,023,008
General and administrative		2,351,430			1,567,342			4,805,876			2,370,510
Total operating expenses		5,592,893			3,568,160			11,056,645			6,570,563
Operating loss		(1,718,414	)		(711,419	)		(3,300,270	)		(1,075,724	)
Other income (expense):
Interest income		21,387			7,044			54,365			7,044
Interest expense		(62,893	)		(2,112	)		(108,237	)		(5,421	)
Total other (expenses)		(41,506	)		4,932			(53,872	)		1,623
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Net loss per share:
Basic	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Diluted	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Basic weighted average common shares outstanding		62,835,140			60,026,430			62,833,091			59,401,930
Diluted weighted average common shares outstanding		62,835,140			60,026,430			62,833,091			59,401,930

 See Notes to Unaudited Condensed Consolidated Financial Statements.

2

ACCELERIZE INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

	Three-month periods ended						Six-month periods ended
	June 30,						June 30,
	2015			2014			2015			2014
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Foreign currency translation gain		8,571			1,069			2,028			2,399
Total other comprehensive gain		8,571			1,069			2,028			2,399
Comprehensive loss	$	(1,751,349	)	$	(705,418	)	$	(3,352,114	)	$	(1,071,702	)

See Notes to Unaudited Condensed Consolidated Financial Statements.

3

ACCELERIZE INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six-month periods ended June 30,
	2015			2014
Cash flows from operating activities:
Net loss	$	(3,354,142	)	$	(1,074,101	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		791,926			578,278
Amortization of debt discount		18,583			3,750
Provision for bad debt		(206,749	)		(20,628	)
Fair value of options		1,126,615			287,985
Changes in operating assets and liabilities:
Accounts receivable		(330,277	)		(525,412	)
Prepaid expenses		(196,268	)		45,314
Accounts payable and accrued expenses		446,136			9,160
Deferred revenues		(149,341	)		(38,007	)
Other assets		(1,576	)		(38,006	)
Net cash used in operating activities		(1,855,093	)		(771,667	)
Cash flows from investing activities:
Capitalized software for internal use		(368,041	)		(311,106	)
Capital expenditures		(115,473	)		(186,997	)
Net cash used in investing activities		(483,514	)		(498,103	)
Cash flows from financing activities:
Proceeds from line of credit		1,600,000			1,000,000
Payment of financing costs		-			(40,000	)
Net proceeds from exercise of options and warrants		9,586			571,219
Net cash provided by financing activities		1,609,586			1,531,219
Effect of exchange rate changes on cash		2,028			2,399
Net (decrease) increase in cash		(726,993	)		263,848
Cash, beginning of period		1,130,667			1,157,315
Cash, end of period	$	403,674		$	1,421,163
Supplemental disclosures of cash flow information:
Cash paid for interest	$	88,300		$	-
Cash paid for income taxes	$	-		$	-
Non-cash investing and financing activities:
Fair value of warrants issued in connection with line of credit	$	37,289		$	32,067
Capital expenditure included in accounts payable	$	37,561		$	-

 See Notes to Unaudited Condensed Consolidated Financial Statements.

4

ACCELERIZE INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS

Accelerize Inc., a Delaware corporation, incorporated on November 22, 2005, owns and operates CAKE, a Software-as-a-Service, or SaaS, platform providing online tracking and analytics solutions for advertisers and online marketers.

The Company provides software solutions for businesses interested in expanding their online advertising spend.

The condensed consolidated balance sheet presented as of December 31, 2014 has been derived from our audited consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to those rules and regulations, but we believe that the disclosures are adequate to make the information presented not misleading. The unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the annual financial statements and notes for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC on March 19, 2015.  In the opinion of management, all adjustments, consisting of normal, recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results of operations for the three and six-month periods ended June 30, 2015 are not necessarily indicative of the results for the year ending December 31, 2015.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the results of operations of Cake Marketing UK Ltd., or the Subsidiary. All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions about collection of accounts receivable, useful life of fixed assets and intangible assets, and assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.

Reclassification

The financial statements for the three and six-month periods ended June 30, 2014 have been reclassified to reflect the increase in personnel last year which allowed for more clearly defined roles and allocation of certain unallocated general and administrative expenses to the Company’s functional areas.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased, to be cash equivalents.

5

Accounts Receivable

The Company’s accounts receivable are due primarily from advertisers and marketers. Collateral is currently not required. The Company also maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance. 

	June 30, 2015		December 31, 2014
Allowance for doubtful accounts	$	5,364	$	212,113

Concentration of Credit Risks

The Company is subject to concentrations of credit risk primarily from cash and cash equivalents and accounts receivable.

The Company’s cash and cash equivalents accounts are held at a financial institution and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $250,000. During the six-month period ended June 30, 2015, the Company has reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company periodically evaluates the credit quality of the financial institution in which it holds deposits.

The Company's accounts receivable are due from customers, generally located in the United States, Europe, Asia, and Canada. None of the Company’s customers accounted for more than 10% of its accounts receivable at June 30, 2015 or December 31, 2014.  The Company does not require any collateral from its customers.

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with ASC Topic 605, Revenue Recognition. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably assured.

The Company’s SaaS revenues are generated from implementation and training fees and a monthly license fee, supplemented by per transaction fees paid by customers for monthly platform usage. The initial term of the customer contract is generally one year with one of two general cancellation policies. Each party may cancel the contract within the initial period or after the initial period, with 30-days’ prior notice. The Company does not provide any general right of return for its delivered items. Services associated with the implementation and training fees have standalone value to the Company’s customers, as there are third-party vendors who offer similar services to the Company’s services. Accordingly, they qualify as separate units of accounting. The Company allocates a fair value to each element deliverable at the recognition date and recognizes such value when the services are provided. The Company bases the fair value of the implementation and training fees on third-party evidence and the monthly license fee on vendor-specific objective evidence. Fees charged by third-party vendors for implementation and training services do not vary significantly from the fees charged by the Company. Services associated with implementation and training fees are generally rendered within a month from the initial contract date. The value attributed to the monthly license fees as well as the fees associated with monthly transaction-based platform usage are recognized in the corresponding period.

6

Product Concentration

The Company generates its revenues from software licensing, usage, and related transaction fees.

Fair Value of Financial Instruments

The Company accounts for assets and liabilities measured at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 Aditional Disclosures Regarding Fair Value Measurements

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and lines of credit approximate their fair value due to the short term maturity of these items.

 Advertising

The Company expenses advertising costs as incurred.

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Advertising expense	$	83,586	$	87,099	$	235,083	$	119,310

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized, but no less than quarterly.

7

Foreign Currency Translation

The Company’s reporting currency is U.S. Dollars. The functional currency of the Company’s Subsidiary in the United Kingdom is British Pounds. The translation from British Pounds to U.S. Dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using the average exchange rate in effect during the period. The resulting translation adjustments are recorded as a component of Accumulated Other Comprehensive Income (Loss). Foreign currency translation gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the unaudited condensed consolidated statements of operations. 

Software Development Costs

Costs incurred in the research and development of software products and significant upgrades and enhancements thereto during the preliminary project stage and the post-implementation operation stage are expensed as incurred. Costs incurred for maintenance and relatively minor upgrades and enhancements are expensed as incurred. Costs associated with the application development stage of new software products and significant upgrades and enhancements thereto are capitalized when 1) management implicitly or explicitly authorizes and commits to funding a software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended. The Company capitalized internal-use software development costs of $368,041 during the six-months ended June 30, 2015. The Company amortizes such costs once the new software products and significant upgrades and enhancements are completed. The unamortized internal-use software development costs amounted to $870,634 and $841,724 at June 30, 2015 and December 31, 2014, respectively. The Company’s amortization expenses associated with capitalized software development costs amounted to $175,278 and $339,132 during the three and six-month periods ended June 30, 2015, respectively, and $109,438 and $167,461 during the three and six-month periods ended June 30, 2014, respectively. Amortization of internal-use software is reflected in cost of revenues.

Share-Based Payment

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or ASC 718. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

The Company has elected to use the BSM option-pricing model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Segment Reporting

The Company generated revenues from one source, its SaaS business, during the three and six-month periods ended June 30, 2015 and 2014. The Company's chief operating decision maker evaluates the performance of the Company based upon revenues and expenses by functional areas as disclosed in the Company's statements of operations.

Recent Accounting Pronouncements

Recent accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company. 

Basic and Diluted Earnings Per Share

Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method).

8

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Numerator:
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Denominator:
Denominator for basic earnings per share--weighted average shares		62,835,140			60,026,430			62,833,091			59,401,930
Effect of dilutive securities- when applicable:
Stock options		-			-			-			-
Warrants		-			-			-			-
Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions		62,835,140			60,026,430			62,833,091			59,401,930
Loss per share:
Basic	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Diluted	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Weighted-average anti-dilutive common share equivalents		15,159,042			15,544,549			17,443,244			15,822,329

 
Property and Equipment

Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives of three years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized

Property and equipment consist of the following at:

	June 30, 2015			December 31, 2014
Internal use software costs	$	1,657,408		$	1,289,367
Computer equipment and software		582,000			476,963
Office furniture and equipment		224,579			187,263
Leasehold improvements		308,748			298,067
		2,772,735			2,251,660
Accumulated depreciation		(1,322,431	)		(826,802	)
	$	1,450,304		$	1,424,858

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Depreciation expense	$	83,996	$	45,137	$	156,498	$	77,484
Amortization expense on internal software	$	175,278	$	109,438	$	339,132	$	167,461

NOTE 3: PREPAID EXPENSES

At June 30, 2015 and December 31, 2014, the Company’s prepaid expenses consisted primarily of prepaid insurance and rent.

9

NOTE 4: CUSTOMER RELATIONSHIPS

During November 2013, the Company completed its acquisition of certain customer relationships of a former competitor. Pursuant to the acquisition, the Company paid $1 million payable in four installments of $250,000 every quarter, beginning March 2014. The Company paid the final installment of $250,000 in December 2014 and has no outstanding balance under this arrangement. The Company has capitalized the acquisition cost, which approximates fair value of the customer relationships, which amounts to $1,000,000 as is fully amortized at June 30, 2015. The Company amortizes such customer relationships over a period of 18 months. The Company incurred amortization expense related to the customer relationships of $129,631 and $296,296 during the three and six-month periods ended June 30, 2015, respectively and $166,667 and $333,334 during the three and six-month periods ended June 30, 2014, respectively.

NOTE 5: DEFERRED REVENUES

The Company’s deferred revenues consist of prepayments made by certain of the Company’s customers and undelivered implementation and training fees.  The Company decreases the deferred revenues by the amount of the services it renders to such clients when provided.

	June 30, 2015		December 31, 2014
Deferred revenues	$	57,134	$	206,475

NOTE 6: LINE OF CREDIT

On September 30, 2014, the Company entered into an amendment of its line of credit, or the Line of Credit, with Square 1 Bank, or the Lender, to borrow up to a maximum of $6,000,000 at the Company’s discretion, an increase from up to $3,000,000 that the Company was permitted to borrow under the original Line of Credit entered into on March 17, 2014. Amounts borrowed will accrue interest at the prime rate in effect from time to time plus 1.25%, not to be less than 5.5% per annum, provided that in no event shall the accrued interest payable with respect to any month be less than $10,000. Accrued interest on amounts borrowed is payable monthly and all other amounts borrowed will be payable in full on the maturity date of March 17, 2016, which maturity date may be extended to March 17, 2017 if the Company provides the Lender with a fully-funded business plan acceptable to the Lender by January 15, 2016 and no event of default has occurred. The Line of Credit may be earlier terminated without a prepayment fee.

The Line of Credit, as amended, contains covenants including, but not limited to, covenants to achieve specified Adjusted EBITDA levels, as defined, and customer renewal levels, limiting capital expenditures, requiring minimum liquidity and restricting the Company’s ability to pay dividends, purchase and sell assets outside the ordinary course and incur additional indebtedness. As of June 30, 2015, the Company was in compliance with these covenants. The occurrence of a material adverse change, as defined, will be an event of default under the Line of Credit, in addition to other customary events of default. The Company granted the Lender a security interest in all of the Company’s personal property and intellectual property.

On June 24, 2015, the Company entered into an amendment of the Line of Credit with the Lender, effective until September 1, 2015, which provides an Advance Rate increase, from 3.00 to 3.25, in the Credit Limit calculation. Additionally, the minimum liquidity covenant of $1,000,000 was removed.

As of June 30, 2015, the Company was in compliance with all covenants. The occurrence of a material adverse change, as defined, will be an event of default under the Line of Credit, in addition to other customary events of default. The Company granted the Lender a security interest in all of the Company’s personal property and intellectual property.

The Company borrowed $1,600,000 from the Line of Credit during the six-month period ended June 30, 2015. The Company owed $4,500,000 under the Line of Credit at June 30, 2015. The interest rate for the amount borrowed was 5.5% per annum.

In connection with the original Line of Credit, the Company issued to the Lender a warrant to purchase up to 46,875 shares of the Company's Common Stock at an exercise price of $1.60 per share. The warrant expires on March 17, 2017. The fair value of the warrant amounted to $32,067. On March 27, 2015, in connection with an obligation under the Line of Credit when borrowings thereunder exceed $3,000,000, the Company issued to the Lender a warrant to purchase 58,824 shares of the Company’s Common Stock at an exercise price of $1.53 per share. This warrant expires on March 27, 2018. The fair value of the warrant amounted to $37,289.

10

Additionally, the Company paid $1,200 to the Lender in financing costs. The fair value of the warrants as well as the financing costs not expensed, which amounted to $1,500, were capitalized as deferred financing costs at June 30, 2015. The Company recognized amortization and interest expenses in connection with the line of credit for the three and six-month periods ended June 30, 2015 and 2014 as follows.

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Amortization expense associated with line of credit	$	11,033	$	1,358	$	18,583	$	4,667
Interest expense associated with line of credit	$	50,845	$	-	$	88,300	$	-

NOTE 7: STOCKHOLDERS’ EQUITY

Common Stock

During the six-month periods ended June 30, 2015 and 2014, the Company generated proceeds of $9,586 and $571,219 from the exercise of 11,457 options and 1,632,051 warrants, respectively.

During the six-month period ended June 30, 2015 the Company issued 9,340 shares of its Common Stock pursuant to the cashless exercise of 21,458 options. During the six-month period ended June 30, 2014, the Company issued 50,390 and 538,542 shares of its Common Stock pursuant to the cashless exercise of 79,158 options and 626,250 warrants respectively.   

Warrants

During the six-month period ended June 30, 2015, the Company issued 58,824 warrants to the Lender. The warrants are exercisable at the price of $1.53 per share and expire on March 27, 2018. The fair value of these warrants which amounted to $37,289, has been recognized as deferred financing fees and is amortized using the effective interest method over the terms of the associated Line of Credit.

The fair value of the warrants granted during the six-month period ended June 30, 2015 is based on the BSM model using the following assumptions:

Effective Exercise price	$	1.60
Effective Market price	$	1.60
Volatility		64	%
Risk-free interest		0.9	%
Term (years)		3
Expected dividend rate		0	%

During the three and six-month periods ended June 30, 2015, the Company recorded expenses of $284,093 and $568,186, respectively, related to warrants granted to employees in prior years. The Company recorded no such expenses in 2014.

 Stock Option Plan

The Company has a Stock Option Plan, or the Plan, under which the total number of shares of capital stock of the Company that may be subject to options under the Plan is currently 22,500,000 shares of Common Stock from either authorized but unissued shares or treasury shares. The individuals who are eligible to receive option grants under the Plan are employees, directors and other individuals who render services to the management, operation or development of the Company or its subsidiaries and who have contributed or may be expected to contribute to the success of the Company or a subsidiary. Every option granted under the Plan shall be evidenced by a written stock option agreement in such form as the Board shall approve from time to time, specifying the number of shares of Common Stock that may be purchased pursuant to the option, the time or times at which the option shall become exercisable in whole or in part, whether the option is intended to be an incentive stock option or a non-incentive stock option, and such other terms and conditions as the Board shall approve.

11

The share-based payment is based on the fair value of the outstanding options amortized over the requisite period of service for option holders, which is generally the vesting period of the options. The fair value of the options granted during the six-month periods ended June 30, 2015 and 2014 is based on the BSM model using the following assumptions:

	June 30, 2015				June 30, 2014
Effective exercise price	$	1.40	-	1.43	$	1.43	-	1.80
Effective market price	$	1.40	-	1.43	$	1.43	-	1.80
Volatility		61	-	62%			64%
Risk-free interest		0.9	-	1.0%			0.9%
Terms (years)		2	-	4			4
Expected dividend rate			0%				0%

The Company generally recognizes its share-based payment over the vesting terms of the underlying options.

	Six-month periods ended
	June 30, 2015		June 30, 2014
Weighted-average grant date fair value	$	0.52	$	1.51
Fair value of options, recognized as selling, general, and administrative expenses	$	558,430	$	287,985
Number of options granted		390,000		1,017,500

The total compensation cost related to non-vested awards not yet recognized amounted to approximately $1,676,874 at June 30, 2015 and the Company expects that it will be recognized over the following weighted-average period of 48 months.

If any options granted under the Plan expire or terminate without having been exercised or cease to be exercisable, such options will be available again under the Plan. All employees of the Company and its subsidiaries are eligible to receive incentive stock options and non-qualified stock options. Non-employee directors and outside consultants who provided bona-fide services not in connection with the offer or sale of securities in a capital raising transaction are eligible to receive non-qualified stock options. Incentive stock options may not be granted below their fair market value at the time of grant or, if to an individual who beneficially owns more than 10% of the total combined voting power of all stock classes of the Company or a subsidiary, the option price may not be less than 110% of the fair value of the Common Stock at the time of grant. The expiration date of an incentive stock option may not be longer than ten years from the date of grant. Option holders, or their representatives, may exercise their vested options up to three months after their employment termination or one year after their death or permanent and total disability. The Plan provides for adjustments upon changes in capitalization.

The Company’s policy is to issue shares pursuant to the exercise of stock options from its available authorized but unissued shares of Common Stock. It does not issue shares pursuant to the exercise of stock options from its treasury shares.

NOTE 8: COMPREHENSIVE LOSS

Comprehensive (loss) income includes changes in equity related to foreign currency translation adjustments. The following table sets forth the reconciliation from net (loss) income to comprehensive (loss) income for the three and six-month periods ended June 30, 2015 and 2014:

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Other comprehensive income (loss):
Foreign currency translation adjustment		8,571			1,069			2,028			2,399
Comprehensive loss	$	(1,751,349	)	$	(705,418	)	$	(3,352,114	)	$	(1,071,702	)

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The following table sets forth the balance in accumulated other comprehensive loss as of June 30, 2015 and December 31, 2014, respectively: 

	June 30,			December 31,
	2015			2014
Accumulated other comprehensive income	$	(8,943	)	$	(10,971	)

NOTE 9: SEGMENTS

The Company operates in one business segment. Percentages of sales by geographic region for the three and six-month periods ended June 30, 2015 and 2014 were approximately as follows:

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
United States		72	%		76	%		73	%		79	%
Europe		19	%		16	%		19	%		15	%
Other		9	%		8	%		8	%		6	%

NOTE 10: COMMITMENTS AND SUBSEQUENT EVENTS

During January 2014, the Company entered into a four year lease for certain office space in Newport Beach, effective February 1, 2014. Under the terms of the lease, the Company initially pays monthly base rent of approximately $22,000 increasing incrementally to approximately $25,000.

During May 2014, the Company entered into a two year sublease in Newport Beach, effective May 1, 2014. The Company initially pays monthly base rent of approximately $10,000 per month, increasing to approximately $11,000 per month by the end of the lease term.

During July 2014, the Company entered into a five year lease for certain office space in a business center in London, England, which commenced on July 30, 2014. The base rent is GBP 89,667 per year and the estimated service charges for the lease are GBP 45,658 per year. The Company will pay an estimated GBP 60,000 for furniture, cabling and build out of the office space.

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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2014. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements. See “Cautionary Statement Regarding Forward Looking Information’’ elsewhere in this report. Because this discussion involves risk and uncertainties, our actual results may differ materially from those anticipated in these forward-looking statements

Overview

We own and operate CAKE, and getcake.com, a marketing technology that provides a comprehensive suite of innovative marketing intelligence tools. Our powerful software-as-a service, or SaaS, solution has been an industry standard for affiliate networks, advertisers, publishers, and agencies to measurably improve and optimize their digital spend. We currently have over 500 customers driving billions of consumer actions monthly through the CAKE enterprise platform.

Our revenue model is based on a monthly license fee, a usage fee (based on volume of clicks, impressions, or leads), a training and implementation fee, and in certain cases, professional services fees and royalties. Clients purchase annual or monthly subscriptions with an additional usage fee. A majority of our revenue is derived from clients in the United States but we have seen a 17% and 30% growth in our client base outside of the United States during the three and six-month period ended June 30, 2015, respectively, when compared to the same periods in 2014.

Our training, support personnel, hosting and cloud-based infrastructure contribute to our cost of operating the business. We anticipate more spending in these areas while we continue to grow and could foresee some savings in infrastructure cost due to economies of scale. However, we want to continue to invest in these areas to support our growth. To go-to-market with our recently released new product, CAKE for Advertisers, enterprise sales representatives were added and marketing programs were created to properly launch and market the product to global advertisers. In addition, development resources continued to design and develop CAKE for Advertisers.

We experienced 46% year over year growth in revenue during the six-month period ended June 30, 2015 when compared to the same period in 2014. The organic growth has been a result of providing the marketing technology industry a comprehensive suite of marketing intelligence tools through innovation and what we believe to be a superior product and customer experience.

We intend to grow revenues by investing in sales, marketing, and product development and innovation. We continued to hire sales executives globally to target specific verticals and accounts with both agencies and advertisers. We allocated a significant portion of our marketing budget to being present at tradeshows, industry publications, and providing the support documentation required by sales initiatives. Additional efforts will be made to speak at industry events and write for online publications, increasing awareness of the CAKE suite of products and the thought leadership driving product development. We also began development on a third product family, CAKE for Publishers, a supply-side platform for use by online publishers.

Our business is headquartered in Newport Beach, California, with offices in Santa Monica, New York and London, allowing us to provide global support to our client base. We are looking to expand our footprint with additional locations in the United States, Europe, Australia, India and Israel. The CAKE platform supports multiple languages and currencies so online marketers can track the performance of their marketing campaigns and better target their digital spend on a global scale.

Our principal offices are located at 20411 SW Birch Street, Suite 250, Newport Beach, CA 92660. Our telephone number there is: (949) 515-2141. Our corporate website is: www.accelerize.com, the contents of which are not part of this quarterly report.

Our Common Stock is quoted on the OTCQB Marketplace under the symbol "ACLZ."  

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 Results of Operations

ACCELERIZE INC.

UNAUDITED CONDENSED CONSOLIDATED RESULTS OF OPERATIONS

	Three-month periods						Increase/		Increase/			Six-month periods						Increase/			Increase/
	ended June 30,						(Decrease)		(Decrease)			ended June 30,						(Decrease)			(Decrease)
	2015			2014			$		%			2015			2014			$			%
Revenues:	$	5,465,824		$	3,906,409			1,559,415		39.9	%	$	10,665,486		$	7,333,606			3,331,880			45.4	%
Cost of revenue		1,591,345			1,049,668			541,677		51.6	%		2,909,111			1,838,767			1,070,344			58.2	%
Gross Profit		3,874,479			2,856,741			1,017,738		35.6	%		7,756,375			5,494,839			2,261,536			41.2	%
Operating expenses:
Research and development		1,326,410			600,259			726,151		121.0	%		2,201,792			1,177,045			1,024,747			87.1	%
Sales and marketing		1,915,053			1,400,559			514,494		36.7	%		4,048,977			3,023,008			1,025,969			33.9	%
General and administrative		2,351,430			1,567,342			784,088		50.0	%		4,805,876			2,370,510			2,435,366			102.7	%
Total operating expenses		5,592,893			3,568,160			2,024,733		56.7	%		11,056,645			6,570,563			4,486,082			68.3	%
Operating loss		(1,718,414	)		(711,419	)		1,006,995		141.5	%		(3,300,270	)		(1,075,724	)		(2,224,546	)		206.8	%
Other income (expense):
Interest income		21,387			7,044			14,343		203.6	%		54,365			7,044			47,321			671.8	%
Interest expense		(62,893	)		(2,112	)		60,781		2877.9	%		(108,237	)		(5,421	)		102,816			1896.6	%
Total other expenses		(41,506	)		4,932			46,438		941.6	%		(53,872	)		1,623			55,495			3419.3	%
Net loss	$	(1,759,920	)	$	(706,487	)		1,053,433		149.1	%	$	(3,354,142	)	$	(1,074,101	)		2,280,041			212.3	%

15

Discussion of Results for Three-Month and Six-Month Periods Ended June 30, 2015 and 2014

Revenues

	Three Months Ended				%			Six Months Ended				%
	June 30,				Change			June 30,				Change
	2015		2014					2015		2014
Revenues	$	5,465,824	$	3,906,409		39.9	%	$	10,665,486	$	7,333,606		45.4	%

We generate revenues from a training and implementation (also known as on-boarding) fee and a monthly licensing fee, supplemented by per-transaction fees paid by customers for monthly platform usage. In certain cases we also generate professional service fees and royalties.

The increase in our software licensing revenues during the three and six-month periods ended June 30, 2015, when compared to the prior year periods, is due to the increased number of customers using our SaaS products and services, as well as increased monthly revenues from our existing customers resulting from higher usage of our SaaS platform. Our number of average clients increased 16% during the three and six-month periods ended June 30, 2015, when compared to the prior year periods, and our average monthly fee per customer increased 14% and 11% during the three and six-month periods ended June 30, 2015, respectively, when compared to the prior year periods. The increase in the number of customers using our SaaS products and services during the three and six-month periods ended June 30, 2014 is primarily due to the increased resources we have devoted to customer acquisition for our SaaS products. The higher usage by our existing customers of the same products is primarily due to higher market acceptance among our larger users who generate a higher volume of transactions.

We believe that our SaaS revenues will continue to increase during the remainder of 2015 when compared to 2014.

Cost of Revenues

	Three Months Ended				%			Six Months Ended				%
	June 30,				Change			June 30,				Change
	2015		2014					2015		2014
Cost of Revenues	$	1,591,345	$	1,049,668		51.6	%	$	2,909,111	$	1,838,767		58.2	%

Cost of revenues consists primarily of web hosting and personnel costs associated with supporting customer on-boarding and training activities, consisting of salaries, benefits, and related infrastructure costs. Web hosting fees are partially correlated to our revenues, depending on each specific agreement we have with our clients. The majority of our clients’ services are hosted on non-dedicated servers, on which capacity can be maximized by server, while certain customers prefer to have their services hosted on dedicated servers, on which capacity can only be maximized by customer and by server. Additionally, our resources associated with on-boarding are usually allocated at the beginning of the relationship with the new customer (usually, the first two months). Accordingly, our personnel costs associated with supporting customer on-boarding activities are not necessarily correlated with our revenues.

During the three and six-month periods ended June 30, 2015, when compared to the prior year periods, cost of revenues significantly increased reflecting the higher number of employees hired to support customer on-boarding and training activities as well as web hosting fees incurred to support our increased number of clients and platform usage, which increased during the three and six-month periods ended June 30, 2015 by approximately $233,000 and $582,000, respectively, when compared to the same periods in 2014.

We believe that our cost of revenues will continue to increase, at lower percentages than our anticipated increase in revenues, during the remainder of 2015, when compared to 2014.

16

Research and Development Expenses

	Three Months Ended				%			Six Months Ended				%
	June 30,				Change			June 30,				Change
	2015		2014					2015		2014
Research and Development	$	1,326,410	$	600,259		121.0	%	$	2,201,792	$	1,177,045		87.1	%

Research and development expenses consist primarily of personnel costs associated with the enhancement and maintenance of our SaaS product offerings, consisting of salaries, benefits, and related infrastructure costs, offset by capitalized software development costs.  

Our research and development expenses increased during the three and six-month periods ended June 30, 2015, when compared to the prior year periods, due to increased staff assigned to the enhancement and maintenance of our software services, which translated to increased personnel costs, offset by the capitalization of software development costs which amounted to $190,617 and $368,041 for the three and six-month periods ended June 30, 2015, respectively.

We believe that our research and development expenses will continue to increase during the remainder of 2015, when compared to 2014, as we continue to enhance the features of our SaaS platform.

Sales and Marketing Expenses

	Three Months Ended				%			Six Months Ended				%
	June 30,				Change			June 30,				Change
	2015		2014					2015		2014
Sales and Marketing	$	1,915,053	$	1,400,559		36.7	%	$	4,048,977	$	3,023,008		33.9	%

Sales and marketing expenses consist primarily of personnel costs associated with the sale and marketing of our SaaS products, including salaries, benefits, and related infrastructure, as well as the costs of related marketing programs, such as trade shows and public relations.

The increase in sales and marketing expenses during the three and six-month periods ended June 30, 2015, when compared to the prior year periods, is primarily due to the increased number of employees associated with the sale of our products as well as increased expenditures in our marketing programs, primarily trade shows. Company rebranding program expenses in mid 2014 contributed to the smaller increase in the three-month period ended June 30, 2015 when compared to the same period in the prior year.

We believe that our sales and marketing expenses will continue to increase in 2015 as we continue to hire more sales and marketing personnel in the U.S. and in Europe in anticipation of increased revenues and as we increase our expenditures in certain marketing programs, such as trade shows.

General and Administrative Expenses

	Three Months Ended				%			Six Months Ended				%
	June 30,				Change			June 30,				Change
	2015		2014					2015		2014
General and administrative	$	2,351,430	$	1,567,342		50.0	%	$	4,805,876	$	2,370,510		102.7	%

General and administrative expenses primarily consist of personnel costs associated with the support of our operations consisting of salaries, benefits, and related infrastructure. Also included are non-personnel costs, such as audit fees, accounting services and legal fees, as well as professional fees, insurance and other corporate expenses such as investor relations.

17

The increase in general and administrative expenses during the three and six-month periods ended June 30, 2015, when compared with the prior year periods, is primarily due to the increased number of employees hired to support our organization, mostly in HR, recruiting, and accounting functions. Increased legal, investor relations, rent, and stock-based compensation expenses contributed to the overall increase when compared to the same period last year.

We believe that our general and administrative expenses will continue to increase during the remainder of 2015 as we expect that the scope of our operations will continue to increase prior to a commensurate increase in revenues.

Other Income/Interest Income

	Three Months Ended				%			Six Months Ended				%
	June 30,				Change			June 30,				Change
	2015		2014					2015		2014
Other Income/Interest Income	$	21,387	$	7,044		203.6	%	$	54,365	$	7,044		671.8	%

Other Income during the three and six-month periods ended June 30, 2015 and 2014 consisted of rent income from a sublease of our Santa Monica office space and profit from sale of non-inventory assets.

Other Expenses/Interest Expense

	Three Months Ended				%			Six Months Ended				%
	June 30,				Change			June 30,				Change
	2015		2014					2015		2014
Other Expenses/Interest Expense	$	62,893	$	2,112		2877.9	%	$	108,237	$	5,421		1896.6	%

Other expense consists of interest charges and amortization of deferred financing costs associated with our Line of Credit with the Lender.

The increase in interest expenses during the three and six-month periods ended June 30, 2015 is primarily due to borrowings we have made from time to time under the Line of Credit. Our interest expense may change during the remainder of 2015 depending on our liquidity needs and we may choose to further finance our working capital needs through our operations, from our Line of Credit, or by issuing equity securities.

Liquidity and Capital Resources

	Ending balance at				Average balance during
	June 30,				six months ended June 30,
	2015		2014		2015		2014
Cash	$	403,674	$	1,421,163	$	767,171	$	1,289,239
Accounts receivable		2,286,592		1,587,710		2,018,079		1,314,691
Accounts payable and accrued expenses		1,689,693		1,687,167		1,446,094		1,695,087
Line of credit		4,500,000		1,000,000		3,700,000		500,000

At June 30, 2015 and 2014, 57% and 63%, respectively, of our total assets consisted of cash and cash equivalents and accounts receivable.

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We extend unsecured credit in the normal course of business to our customers. The determination of the appropriate amount of the reserve for uncollectible accounts is based upon a review of the amount of credit extended, the length of time each receivable has been outstanding, and the specific customers from whom the receivables are due.

The objective of liquidity management is to ensure that we have ready access to sufficient funds to meet commitments while implementing our growth strategy. Our primary sources of liquidity historically include the sale of our securities and other financing activities. Most recently, we have entered into the Line of Credit.

We do not have any material commitments for capital expenditures of tangible items.

On September 30, 2014, we entered into an amendment of our Line of Credit with the Lender to borrow up to a maximum of $6,000,000 at our discretion, an increase from up to $3,000,000 that we were permitted to borrow under the original Line of Credit entered into on March 17, 2014. Amounts borrowed will accrue interest at the prime rate in effect from time to time plus 1.25%, not to be less than 5.5% per annum, provided that in no event shall the accrued interest payable with respect to any month be less than $10,000. Accrued interest on amounts borrowed is payable monthly and all other amounts borrowed will be payable in full on the maturity date of March 17, 2016, which maturity date may be extended to March 17, 2017 if we provide the Lender with a fully-funded business plan acceptable to the Lender by January 15, 2016 and no event of default has occurred. The Line of Credit may be earlier terminated without a prepayment fee.

The Line of Credit, as amended, contains covenants including, but not limited to, covenants to achieve specified Adjusted EBITDA levels and customer renewal levels, limiting capital expenditures, requiring minimum liquidity and restricting our ability to pay dividends, purchase and sell assets outside the ordinary course and incur additional indebtedness. As of June 30, 2015, we were in compliance with these covenants. The occurrence of a material adverse change, as defined, will be an event of default under the Line of Credit, in addition to other customary events of default. We granted the Lender a security interest in all of our personal property and intellectual property.

We owed $4,500,000 under the Line of Credit at June 30, 2015. The interest rate for the amount borrowed was 5.5% per annum.

We believe we have sufficient cash to fund our operations for the next 12 months. We currently expect to use cash balances, borrowings under the Line of Credit, and net proceeds from offerings of our equity securities to fund our future operations, capital expenditures and other expenses. We currently have an effective shelf registration statement that allows us to issue public securities on an expedited basis, but it does not assure that there will be buyers for such securities. Our ability to obtain, and the costs of, any future financings will depend primarily on our success, profitability and market conditions, among other factors.  

19

Changes in Cash Flows

	Six-month periods ended June 30,
	2015			2014
Cash flows from operating activities:
Net loss	$	(3,354,142	)	$	(1,074,101	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		791,926			578,278
Amortization of debt discount		18,583			3,750
Provision for bad debt		(206,749	)		(20,628	)
Fair value of options		1,126,615			287,985
Changes in operating assets and liabilities:
Accounts receivable		(330,277	)		(525,412	)
Prepaid expenses		(196,268	)		45,314
Accounts payable and accrued expenses		446,136			9,160
Deferred revenues		(149,341	)		(38,007	)
Other assets		(1,576	)		(38,006	)
Net cash used in operating activities		(1,855,093	)		(771,667	)
Cash flows from investing activities:
Capitalized software for internal use		(368,041	)		(311,106	)
Capital expenditures		(115,473	)		(186,997	)
Net cash used in investing activities		(483,514	)		(498,103	)
Cash flows from financing activities:
Proceeds from line of credit		1,600,000			1,000,000
Payment of financing costs		-			(40,000	)
Net proceeds from exercise of options and warrants		9,586			571,219
Net cash provided by financing activities		1,609,586			1,531,219
Effect of exchange rate changes on cash		2,028			2,399
Net (decrease) increase in cash		(726,993	)		263,848

Six months ended June 30, 2015

The slight decrease in accounts receivable as of June 30, 2015 when compared to the same period in 2014, is primarily due to improved collection efforts while revenues continued to increase. Accounts payable and accrued expenses increased during the six-month period ended June 30, 2015 when compared to the same period in 2014 primarily due to improved terms with an increased number of vendors.

Cash used in investing activities during the six-month period ended June 30, 2015 consists of purchases of computer equipment and other capital expenditures of approximately $115,000, and capitalization of development costs for internal-use software of approximately $368,000.

Cash provided by financing activities during the six-month period ended June 30, 2015 resulted from the proceeds from the exercise of options of approximately $10,000 and a $1,600,000 draw down on the Line of Credit.

Despite an increase in revenues, the decrease in net operating cash flows during the six-month period ended June 30, 2015 was mainly due to a higher increase in correlated web-hosting and payroll costs.

20

Six months ended June 30, 2014

The increase in accounts receivable as of June 30, 2014, when compared to the same period in the prior year, is primarily due to a commensurate increase in revenues. The increase in accounts payable and accrued expenses during the six-month period ended June 30, 2014, when compared to the same period in the prior year, is primarily due to the accrual of the second payment of $250,000 to a former competitor in relation to the purchase of customer relationships.

Cash used in investing activities during the six-month period ended June 30, 2014 consists of purchases of computer equipment and other capital expenditures of approximately $187,000, and capitalization of development costs for internal-use software of approximately $311,000.

Cash provided by financing activities during the six-month period ended June 30, 2014 resulted from the proceeds from the exercise of warrants of approximately $571,000 and $1,000,000 of draw downs on the Line of Credit on June 2014. This amount was offset by $40,000 in financing costs related to the Line of Credit.

Despite an increase in revenues, the decrease in net operating cash flows during the six-month period ended June 30, 2014 was due to a higher increase in correlated web-hosting and payroll costs, as well as an increase in accounts receivable due to a commensurate increase in revenues.

Capital Raising Transactions

Exercise of warrants

There were no proceeds generated from the exercise of warrants during the six-month period ended June 30, 2015.

Other outstanding obligations at June 30, 2015

Line of Credit

During the three months ended June 30, 2015, we borrowed an additional $600,000 under the Line of Credit. As of June 30, 2015, we owed $4,500,000 under the Line of Credit.

Warrants

As of June 30, 2015, 5,380,699 shares of our Common Stock are issuable pursuant to the exercise of warrants.

Options

As of June 30, 2015, 14,708,336 shares of our Common Stock are issuable pursuant to the exercise of options.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer, who is our principal executive officer, and our Chief Financial Officer, who is our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2015, our disclosure controls and procedures are effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

21

Changes in Internal Control Over Financial Reporting

During the quarter ended June 30, 2015, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The following supplements and amends our discussion set forth under Part II, Item 1 "Legal Proceedings" in our Quarterly Report on Form 10-Q for the period ended March 31, 2015.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings, including the following, that we currently believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows.

On February 23, 2015, we commenced an action against Jeff McCollum, the former President of our CAKE division, by filing a complaint in the Superior Court of the State of California, County of Orange, Central District, asserting claims against Mr. McCollum for fraud, breach of contract, and breach of fiduciary duty, among others. Our complaint asserts that, during Mr. McCollum’s employment, he engaged in fraud, breached his fiduciary duties to us, and breached the terms of his employment contract in connection with his duties to us. We terminated Mr. McCollum’s employment on September 8, 2014 for cause as defined in Mr. McCollum’s employment agreement as a result of, among other things, Mr. McCollum having abandoned his position and professional responsibilities (which we concluded constituted, among other things, material breaches of his employment agreement and that his breaches, failures and refusals to perform were incapable of cure, thus supporting a for cause termination). Our complaint additionally asserts that following our termination of Mr. McCollum, he illegally accessed and downloaded our proprietary and confidential information, converted our property, and destroyed relevant evidence. In addition to seeking a temporary restraining order, preliminary injunction, and permanent injunction, all enjoining Mr. McCollum from further breaching his employment agreement, our initial complaint sought general and special damages, pre- and post-judgment interest, and costs of suit according to proof, plus any other legal or equitable relief as the court may deem just and proper. On March 26, 2015, we filed a First Amended Complaint clarifying the trade secret cause of action. Mr. McCollum filed a motion to strike portions of that First Amended Complaint but, on April 29, 2015, the court denied that motion in its entirety.  On May 29, 2015, Mr. McCollum filed a cross-complaint alleging breach of contract by us with respect to Mr. McCollum’s employment agreement and seeking, among other things, the remaining payments under Mr. McCollum’s employment agreement, estimated by Mr. McCollum to be approximately $1.5 million, and the right to exercise 5.825 million stock options we deemed forfeited upon Mr. McCollum’s termination for cause (per the terms of Mr. McCollum’s stock option agreements). On July 6, 2015, we answered Mr. McCollum’s cross complaint by denying Mr. McCollum’s allegations and asserting affirmative defenses.  At this point we have not actively pursued a temporary restraining order, preliminary injunction, or permanent injunction, but we continue to seek damages from Mr. McCollum based on the claims we have asserted.

On February 23, 2015, Mr. McCollum commenced a separate action by filing a complaint in the Superior Court of the State of California, County of Orange, Central District, asserting claims against us for violation of California Commercial Code §8401 and breach of fiduciary duty arising from Mr. McCollum’s request to have the restrictive legend removed from his share certificate representing 1.89 million shares of our common stock owned by him, and seeking declaratory relief as to whether he is entitled to have the restrictive legend removed from his share certificate. Mr. McCollum alleges that we contend that the restriction should remain on his share certificate. Mr. McCollum has requested a judicial determination as to his rights to have the restrictive legend removed from his share certificate, and an order compelling us to issue him a new certificate without a restrictive legend. He also seeks compensatory and punitive damages, pre-judgment interest, an award of costs, and any other relief the court may deem proper. On March 26, 2015, we filed a demurrer to this action, asserting that Mr. McCollum’s complaint fails to state facts sufficient to constitute a cause of action against us. On June 17, 2015, the court overruled our demurrer as to the declaratory relief claim and sustained our demurrer to the other two causes of action included in Mr. McCollum’s complaint, but granted Mr. McCollum 20 days’ leave to amend his complaint as to these two causes of action.  On July 7, 2015, Mr. McCollum filed a First Amended Complaint alleging the same causes of action and seeking the same relief as in his original complaint.  On August 10, 2015, we filed a demurrer to that First Amended Complaint, arguing that the two causes of action for damages fail to state facts sufficient to constitute causes of action against us. That demurrer is scheduled to be heard on September 23, 2015.  

22

Item 1A. Risk Factors

Except as set forth below, there have been no material changes to the Risk Factors set forth in our Annual Report on Form 10-K filed with the SEC on March 19, 2015.

Some of the shares issued and options granted under our stock plan may have been issued in transactions that were not exempt from registration under certain state securities laws, the result of which is that the holders of these shares and/or options may have rescission rights that could require us to reacquire the shares and/or options.

Some of the shares issued and options granted under our equity compensation plan may not have been exempt from registration or qualification under the securities laws of certain states. We recently became aware that we may not have had a valid exemption for the issuance of these options and shares exercised upon exercise of these options under certain state laws. Because of the lack of registration and, potentially, the lack of a valid exemption from registration, the options we granted and the shares issued upon exercise of these options may have been issued in violation of certain state securities laws and may be subject to rescission. In order to address this issue, we may make a rescission offer to the holders of these shares and options as soon as practicable. 

If this rescission offer is accepted, we could be required to make payments to the holders of these shares and options in an amount not yet determinable by us. If any or all of the offerees reject the rescission offer, we may continue to be liable under state securities laws for payments to the offerees. If it is determined that we offered securities without properly registering them under state law, or securing an exemption from registration, regulators could impose monetary fines or other sanctions as provided under these laws. 

We could become subject to litigation that could be costly, result in the diversion of management’s attention and require us to pay damages.

From time to time, we may become involved in legal proceedings. We are currently engaged in a litigation with Jeff McCollum, the former President of our CAKE division. Although we intend to pursue our claims against Mr. McCollum, and to defend ourselves vigorously against his claims, we cannot provide assurance that this litigation or future legal proceedings will result in damages being awarded to us or will not result in substantial costs to us or otherwise adversely impact our reputation.

Item 6.  Exhibits

10.1	Fourth Amendment to Loan Agreement, dated June 24, 2015 between Accelerize Inc. and Square 1 Bank (incorporated by reference to the Company’s Current Report on Form 8-K filed on June 30, 2015).
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and15d-14(a).*
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a).*
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350.**
31.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. 1350.**
101.	The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Comprehensive (Loss) Income, (iv) the Statements of Cash Flows, and (v) related notes to these financial statements.*

*	Filed herewith.
**	Furnished herewith.

23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ACCELERIZE INC.
Dated: August 13, 2015	By:	/s/ Brian Ross
		Brian Ross President and Chief Executive Officer (Principal Executive Officer)
Dated: August 13, 2015	By:	/s/ Michael Lin
		Michael Lin
		Chief Financial Officer
		(Principal Financial Officer)

24

EX-31.1

Exhibit 31.1

CERTIFICATION

Pursuant to Rule 13a-14(a) and 15d-14(a)

Under the Securities Exchange Act of 1934, as Amended

I, Brian Ross, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2015 of Accelerize Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 13, 2015

/s/ Brian Ross

Brian Ross

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

Pursuant to Rule 13a-14(a) and 15d-14(a)

Under the Securities Exchange Act of 1934, as Amended

I, Michael Lin, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2015 of Accelerize Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 13, 2015

/s/ Michael Lin

Michael Lin

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

 

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report (the “Report”) of Accelerize Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof, I, Brian Ross, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2015	By: /s/ Brian Ross
	Brian Ross President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report (the “Report”) of Accelerize Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof, I, Michael Lin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2015	By: /s/ Michael Lin
	Michael Lin Chief Financial Officer (Principal Financial Officer)

XML

Note 8 - Comprehensive (Loss) Income - Accumulated Other Comprehensive Loss (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Accumulated other comprehensive income	$ (8,943)	$ (10,971)

XML

Note 6 - Line of Credit - Interest and Amortization Expense - Line of Credit (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Line of Credit [Member]
Amortization expense associated with line of credit	$ 11,033	$ 1,358	$ 18,583	$ 4,667
Interest expense associated with line of credit	$ 50,845		88,300
Amortization expense associated with line of credit			$ 18,583	$ 3,750

XML

Note 2 - Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Accounts receivable, allowance for bad debt	$ 5,364	$ 212,113

XML

Note 10 - Commitments and Subsequent Events (Details Textual)	1 Months Ended			6 Months Ended
	Jul. 31, 2014 GBP (£)	May. 31, 2014 USD ($)	Jan. 31, 2014 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)
Office Space In Newport Beach California [Member] | Minimum [Member]
Operating Lease Monthly Rent			$ 22,000
Office Space In Newport Beach California [Member] | Maximum [Member]
Operating Lease Monthly Rent			$ 25,000
Office Space In Newport Beach California [Member]
Lessee Leasing Arrangements, Operating Leases, Term of Contract			4 years
Sublease In Newport Beach [Member] | Minimum [Member]
Operating Lease Monthly Rent		$ 10,000
Sublease In Newport Beach [Member] | Maximum [Member]
Operating Lease Monthly Rent		$ 11,000
Sublease In Newport Beach [Member]
Lessee Leasing Arrangements, Operating Leases, Term of Contract		2 years
Office Space in London England [Member]
Lessee Leasing Arrangements, Operating Leases, Term of Contract	5 years
Operating Lease Monthly Rent | £	£ 89,667
Operating Lease Service Charges | £	45,658
Payments to Acquire Property, Plant, and Equipment | £	£ 60,000
Payments to Acquire Property, Plant, and Equipment				$ 115,473	$ 186,997

XML

Note 7 - Convertible Notes Payable and Note Payable - Additional Information Stock Options (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Selling General And Administrative Expenses [Member]
Fair value of options, recognized as selling, general, and administrative expenses	$ 558,430	$ 287,985
Weighted-average grant date fair value (in dollars per share)	$ 0.52	$ 1.51
Fair value of options, recognized as selling, general, and administrative expenses	$ 1,126,615	$ 287,985
Number of options granted (in shares)	390,000	1,017,500

XML

Note 3 - Prepaid Expenses

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Other Assets Disclosure [Text Block]

NOTE 3: PREPAID EXPENSES

At June 30, 2015 and December 31, 2014, the Company’s prepaid expenses consisted primarily of prepaid insurance and rent.

XML

Note 2 - Summary of Significant Accounting Policies - Property and Equipment, Depreciation Expense (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Depreciation expense	$ 83,996	$ 45,137	$ 156,498	$ 77,484
Amortization expense on internal software	$ 175,278	$ 109,438	$ 339,132	$ 167,461

XML

Note 2 - Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Software Development [Member]
Property, plant, and equipment, gross	$ 1,657,408	$ 1,289,367
Computer Equipment [Member]
Property, plant, and equipment, gross	582,000	476,963
Furniture and Fixtures [Member]
Property, plant, and equipment, gross	224,579	187,263
Leasehold Improvements [Member]
Property, plant, and equipment, gross	308,748	298,067
Property, plant, and equipment, gross	2,772,735	2,251,660
Accumulated depreciation	(1,322,431)	(826,802)
	$ 1,450,304	$ 1,424,858

XML

Note 4 - Customer Relationships (Details Textual) - USD ($)	1 Months Ended	3 Months Ended			6 Months Ended
	Nov. 30, 2013	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Customer Relationships [Member] | Payable Quarterly [Member]
Debt Instrument, Periodic Payment	$ 250,000
Customer Relationships [Member]
Notes Payable, Current		$ 0			$ 0
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life					1 year 180 days
Noncash or Part Noncash Acquisition, Debt Assumed	$ 1,000,000
Repayments of Debt			$ 250,000
Finite-Lived Intangible Assets, Net		1,000,000			$ 1,000,000
Amortization of Intangible Assets		$ 129,631		$ 166,667	$ 296,296	$ 333,334
Finite-Lived Intangible Assets, Net			$ 296,296
Amortization of Intangible Assets		$ 175,278		$ 109,438	$ 339,132	$ 167,461

XML

Note 5 - Deferred Revenues - Deferred Revenues (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Deferred revenues	$ 57,134	$ 206,475

XML

Note 2 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions about collection of accounts receivable, useful life of fixed assets and intangible assets, and assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.

Reclassification

The financial statements for the three and six-month periods ended June 30, 2014 have been reclassified to reflect the increase in personnel last year which allowed for more clearly defined roles and allocation of certain unallocated general and administrative expenses to the Company’s functional areas.

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased, to be cash equivalents.

Accounts Receivable

The Company’s accounts receivable are due primarily from advertisers and marketers. Collateral is currently not required. The Company also maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance. 

	June 30, 2015		December 31, 2014
Allowance for doubtful accounts	$	5,364	$	212,113

Concentration of Credit Risks

The Company is subject to concentrations of credit risk primarily from cash and cash equivalents and accounts receivable.

The Company’s cash and cash equivalents accounts are held at a financial institution and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $250,000. During the six-month period ended June 30, 2015, the Company has reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company periodically evaluates the credit quality of the financial institution in which it holds deposits.

The Company's accounts receivable are due from customers, generally located in the United States, Europe, Asia, and Canada. None of the Company’s customers accounted for more than 10% of its accounts receivable at June 30, 2015 or December 31, 2014.  The Company does not require any collateral from its customers.

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with ASC Topic 605, Revenue Recognition. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably assured.

The Company’s SaaS revenues are generated from implementation and training fees and a monthly license fee, supplemented by per transaction fees paid by customers for monthly platform usage. The initial term of the customer contract is generally one year with one of two general cancellation policies. Each party may cancel the contract within the initial period or after the initial period, with 30-days’ prior notice. The Company does not provide any general right of return for its delivered items. Services associated with the implementation and training fees have standalone value to the Company’s customers, as there are third-party vendors who offer similar services to the Company’s services. Accordingly, they qualify as separate units of accounting. The Company allocates a fair value to each element deliverable at the recognition date and recognizes such value when the services are provided. The Company bases the fair value of the implementation and training fees on third-party evidence and the monthly license fee on vendor-specific objective evidence. Fees charged by third-party vendors for implementation and training services do not vary significantly from the fees charged by the Company. Services associated with implementation and training fees are generally rendered within a month from the initial contract date. The value attributed to the monthly license fees as well as the fees associated with monthly transaction-based platform usage are recognized in the corresponding period.

Product Concentration

The Company generates its revenues from software licensing, usage, and related transaction fees.

Fair Value of Financial Instruments

The Company accounts for assets and liabilities measured at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 Aditional Disclosures Regarding Fair Value Measurements

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and lines of credit approximate their fair value due to the short term maturity of these items.

 

Advertising

The Company expenses advertising costs as incurred.

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Advertising expense	$	83,586	$	87,099	$	235,083	$	119,310

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized, but no less than quarterly.

Foreign Currency Translation

The Company’s reporting currency is U.S. Dollars. The functional currency of the Company’s Subsidiary in the United Kingdom is British Pounds. The translation from British Pounds to U.S. Dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using the average exchange rate in effect during the period. The resulting translation adjustments are recorded as a component of Accumulated Other Comprehensive Income (Loss). Foreign currency translation gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the unaudited condensed consolidated statements of operations. 

Software Development Costs

Costs incurred in the research and development of software products and significant upgrades and enhancements thereto during the preliminary project stage and the post-implementation operation stage are expensed as incurred. Costs incurred for maintenance and relatively minor upgrades and enhancements are expensed as incurred. Costs associated with the application development stage of new software products and significant upgrades and enhancements thereto are capitalized when 1) management implicitly or explicitly authorizes and commits to funding a software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended. The Company capitalized internal-use software development costs of $368,041 during the six-months ended June 30, 2015. The Company amortizes such costs once the new software products and significant upgrades and enhancements are completed. The unamortized internal-use software development costs amounted to $870,634 and $841,724 at June 30, 2015 and December 31, 2014, respectively. The Company’s amortization expenses associated with capitalized software development costs amounted to $175,278 and $339,132 during the three and six-month periods ended June 30, 2015, respectively, and $109,438 and $167,461 during the three and six-month periods ended June 30, 2014, respectively. Amortization of internal-use software is reflected in cost of revenues.

Share-Based Payment

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or ASC 718. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

The Company has elected to use the BSM option-pricing model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Segment Reporting

The Company generated revenues from one source, its SaaS business, during the three and six-month periods ended June 30, 2015 and 2014. The Company's chief operating decision maker evaluates the performance of the Company based upon revenues and expenses by functional areas as disclosed in the Company's statements of operations.

Recent Accounting Pronouncements

Recent accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company. 

Basic and Diluted Earnings Per Share

Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method).

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Numerator:
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Denominator:
Denominator for basic earnings per share--weighted average shares		62,835,140			60,026,430			62,833,091			59,401,930
Effect of dilutive securities- when applicable:
Stock options		-			-			-			-
Warrants		-			-			-			-
Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions		62,835,140			60,026,430			62,833,091			59,401,930
Loss per share:
Basic	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Diluted	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Weighted-average anti-dilutive common share equivalents		15,159,042			15,544,549			17,443,244			15,822,329

 

Property and Equipment

Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives of three years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized

Property and equipment consist of the following at:

	June 30, 2015			December 31, 2014
Internal use software costs	$	1,657,408		$	1,289,367
Computer equipment and software		582,000			476,963
Office furniture and equipment		224,579			187,263
Leasehold improvements		308,748			298,067
		2,772,735			2,251,660
Accumulated depreciation		(1,322,431	)		(826,802	)
	$	1,450,304		$	1,424,858

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Depreciation expense	$	83,996	$	45,137	$	156,498	$	77,484
Amortization expense on internal software	$	175,278	$	109,438	$	339,132	$	167,461

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Note 6 - Line of Credit (Details Textual) - USD ($)	1 Months Ended		6 Months Ended
	Mar. 27, 2015	Mar. 17, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 24, 2015	Jun. 23, 2015
Line of Credit [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate		1.25%
Line of Credit [Member] | Warrants Issued in Connection with Original Line of Credit [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		46,875
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 1.60
Warrants Issued Fair Value Disclosure		$ 32,067
Line of Credit [Member]
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum		5.50%
Debt Instrument, Covenant, Minimum Accrued Interest Per Month		$ 10,000
Line of Credit, Advance Rate					3.25%	3.00%
Debt Instrument, Interest Rate, Effective Percentage			5.50%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	58,824		58,824
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.53		$ 1.53
Warrants Issued Fair Value Disclosure	$ 37,289		$ 37,289
Line of Credit, Maximum Threshold to Trigger Warrant Issuance to Lender	$ 3,000,000
Payments of Financing Costs			1,200
Deferred Finance Costs, Net			1,500
Line of Credit Facility, Maximum Borrowing Capacity		$ 3,000,000	6,000,000
Proceeds from Lines of Credit			1,600,000	$ 1,000,000
Long-term Line of Credit			$ 4,500,000
Payments of Financing Costs				$ 40,000

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Note 9 - Segments (Details Textual)	6 Months Ended
	Jun. 30, 2015
Number of Operating Segments	1

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current Assets:
Cash	$ 403,674	$ 1,130,667
Accounts receivable, net of allowance for bad debt of $5,364 and $212,113, respectively	2,286,592	1,749,566
Prepaid expenses and other assets	402,846	204,268
Total current assets	3,093,112	3,084,501
Property and equipment, net of accumulated depreciation of $1,322,431 and $826,802, respectively	$ 1,450,304	1,424,858
Customer relationships, net of accumulated amortization of $1,000,000 and $703,704, respectively		296,296
Deferred financing costs, net of accumulated amortization of $37,899 and $19,317, respectively	$ 59,957	37,750
Other assets	134,564	132,988
Total assets	4,737,937	4,976,393
Current Liabilities:
Accounts payable and accrued expenses	1,689,693	1,202,495
Deferred revenues	57,134	$ 206,475
Other current liabilities	2,310
Total current liabilities	1,749,137	$ 1,408,970
Line of credit	4,500,000	2,900,000
Total liabilities	$ 6,249,137	$ 4,308,970
Commitments and contingencies
Stockholders' Equity (Deficit):
Common stock; $0.001 par value; 100,000,000 shares authorized; 62,837,351 and 62,816,554 shares issued and outstanding, respectively	$ 62,836	$ 62,815
Additional paid-in capital	20,791,623	19,618,153
Accumulated deficit	(22,356,716)	(19,002,574)
Accumulated other comprehensive income	(8,943)	(10,971)
Total stockholders’ equity (deficit)	(1,511,200)	667,423
Total liabilities and stockholders’ equity (deficit)	$ 4,737,937	$ 4,976,393

XML

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net loss	$ (3,354,142)	$ (1,074,101)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	791,926	578,278
Amortization of debt discount	18,583	3,750
Provision for bad debt	(206,749)	(20,628)
Fair value of options	1,126,615	287,985
Changes in operating assets and liabilities:
Accounts receivable	(330,277)	(525,412)
Prepaid expenses	(196,268)	45,314
Accounts payable and accrued expenses	446,136	9,160
Deferred revenues	(149,341)	(38,007)
Other assets	(1,576)	(38,006)
Net cash used in operating activities	(1,855,093)	(771,667)
Cash flows from investing activities:
Capitalized software for internal use	(368,041)	(311,106)
Capital expenditures	(115,473)	(186,997)
Net cash used in investing activities	(483,514)	(498,103)
Cash flows from financing activities:
Proceeds from line of credit	$ 1,600,000	1,000,000
Payment of financing costs		(40,000)
Net proceeds from exercise of options and warrants	$ 9,586	571,219
Net cash provided by financing activities	1,609,586	1,531,219
Effect of exchange rate changes on cash	2,028	2,399
Net (decrease) increase in cash	(726,993)	263,848
Cash, beginning of period	1,130,667	1,157,315
Cash, end of period	403,674	$ 1,421,163
Supplemental disclosures of cash flow information:
Cash paid for interest	88,300
Cash paid for income taxes	0	$ 0
Non-cash investing and financing activities:
Fair value of warrants issued in connection with line of credit	37,289	$ 32,067
Capital expenditure included in accounts payable	$ 37,561

XML

Note 7 - Stockholders' Equity - Assumptions Used to Determine Fair Value of Warrants Granted (Details) - $ / shares	6 Months Ended
	Jun. 30, 2015
Warrant [Member]
Effective Exercise price (in dollars per share)	$ 1.60
Effective Market price (in dollars per share)	$ 1.60
Volatility	64.00%
Risk-free interest	0.90%
Term (years)	3 years
Expected dividend rate	0.00%

XML

Note 8 - Comprehensive (Loss) Income (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Comprehensive Income (Loss) [Table Text Block]

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Other comprehensive income (loss):
Foreign currency translation adjustment		8,571			1,069			2,028			2,399
Comprehensive loss	$	(1,751,349	)	$	(705,418	)	$	(3,352,114	)	$	(1,071,702	)

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	June 30,			December 31,
	2015			2014
Accumulated other comprehensive income	$	(8,943	)	$	(10,971	)

XML

Note 7 - Stockholders' Equity - Assumptions Used to Determine Fair Value of Stock Options Granted (Details) - $ / shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Minimum [Member]
Effective exercise price (in dollars per share)	$ 1.40	$ 1.43
Effective market price (in dollars per share)	$ 1.40	1.43
Volatility	61.00%
Risk-free interest	0.90%
Terms (years)	2 years
Maximum [Member]
Effective exercise price (in dollars per share)	$ 1.43	1.80
Effective market price (in dollars per share)	$ 1.43	$ 1.80
Volatility	62.00%
Risk-free interest	0.90%
Terms (years)	4 years
Volatility		64.00%
Risk-free interest		0.90%
Terms (years)		4 years
Expected dividend rate	0.00%	0.00%

XML

Note 2 - Summary of Significant Accounting Policies (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Computer Software, Intangible Asset [Member] | Cost Of Revenues [Member]
Amortization of Intangible Assets	$ 175,278	$ 109,438	$ 339,132	$ 167,461
Estimated [Member]
Property, Plant and Equipment, Useful Life			3 years
Number of Reportable Segments	1	1	1	1
Cash, FDIC Insured Amount	$ 250,000		$ 250,000
Payments to Develop Software			368,041	$ 311,106
Capitalized Computer Software, Net	870,634		870,634		$ 841,724
Amortization of Intangible Assets	$ 175,278	$ 109,438	$ 339,132	$ 167,461

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Note 1 - Organization and Description of Business

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

NOTE 1: ORGANIZATION AND DESCRIPTION OF BUSINESS

Accelerize Inc., a Delaware corporation, incorporated on November 22, 2005, owns and operates CAKE, a Software-as-a-Service, or SaaS, platform providing online tracking and analytics solutions for advertisers and online marketers.

The Company provides software solutions for businesses interested in expanding their online advertising spend.

The condensed consolidated balance sheet presented as of December 31, 2014 has been derived from our audited consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been omitted pursuant to those rules and regulations, but we believe that the disclosures are adequate to make the information presented not misleading. The unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the annual financial statements and notes for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the SEC on March 19, 2015.  In the opinion of management, all adjustments, consisting of normal, recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results of operations for the three and six-month periods ended June 30, 2015 are not necessarily indicative of the results for the year ending December 31, 2015.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the results of operations of Cake Marketing UK Ltd., or the Subsidiary. All material intercompany accounts and transactions between the Company and the Subsidiary have been eliminated in consolidation.

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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Accounts receivable, allowance for bad debt	$ 5,364	$ 212,113
Property and equipment, accumulated depreciation	1,322,431	826,802
Customer relationships, net of accumulated amortization	1,000,000	703,704
Deferred financing costs, net of accumulated amortization	$ 37,899	$ 19,317
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	62,837,351	62,816,554
Common stock, shares outstanding (in shares)	62,837,351	62,816,554

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reported period. Actual results will differ from those estimates. Included in these estimates are assumptions about collection of accounts receivable, useful life of fixed assets and intangible assets, and assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.

Reclassification, Policy [Policy Text Block]

Reclassification

The financial statements for the three and six-month periods ended June 30, 2014 have been reclassified to reflect the increase in personnel last year which allowed for more clearly defined roles and allocation of certain unallocated general and administrative expenses to the Company’s functional areas.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased, to be cash equivalents.

Receivables, Policy [Policy Text Block]

Accounts Receivable

The Company’s accounts receivable are due primarily from advertisers and marketers. Collateral is currently not required. The Company also maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance. 

	June 30, 2015		December 31, 2014
Allowance for doubtful accounts	$	5,364	$	212,113

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risks

The Company is subject to concentrations of credit risk primarily from cash and cash equivalents and accounts receivable.

The Company’s cash and cash equivalents accounts are held at a financial institution and are insured by the Federal Deposit Insurance Corporation, or the FDIC, up to $250,000. During the six-month period ended June 30, 2015, the Company has reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institutions, the Company periodically evaluates the credit quality of the financial institution in which it holds deposits.

The Company's accounts receivable are due from customers, generally located in the United States, Europe, Asia, and Canada. None of the Company’s customers accounted for more than 10% of its accounts receivable at June 30, 2015 or December 31, 2014.  The Company does not require any collateral from its customers.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company recognizes revenue on arrangements in accordance with ASC Topic 605, Revenue Recognition. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability of the resulting receivable is reasonably assured.

The Company’s SaaS revenues are generated from implementation and training fees and a monthly license fee, supplemented by per transaction fees paid by customers for monthly platform usage. The initial term of the customer contract is generally one year with one of two general cancellation policies. Each party may cancel the contract within the initial period or after the initial period, with 30-days’ prior notice. The Company does not provide any general right of return for its delivered items. Services associated with the implementation and training fees have standalone value to the Company’s customers, as there are third-party vendors who offer similar services to the Company’s services. Accordingly, they qualify as separate units of accounting. The Company allocates a fair value to each element deliverable at the recognition date and recognizes such value when the services are provided. The Company bases the fair value of the implementation and training fees on third-party evidence and the monthly license fee on vendor-specific objective evidence. Fees charged by third-party vendors for implementation and training services do not vary significantly from the fees charged by the Company. Services associated with implementation and training fees are generally rendered within a month from the initial contract date. The value attributed to the monthly license fees as well as the fees associated with monthly transaction-based platform usage are recognized in the corresponding period.

Product Concentration [Policy Text Block]

Product Concentration

The Company generates its revenues from software licensing, usage, and related transaction fees.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

The Company accounts for assets and liabilities measured at fair value on a recurring basis in accordance with ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 Aditional Disclosures Regarding Fair Value Measurements

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and lines of credit approximate their fair value due to the short term maturity of these items.

Advertising Costs, Policy [Policy Text Block]

 

Advertising

The Company expenses advertising costs as incurred.

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Advertising expense	$	83,586	$	87,099	$	235,083	$	119,310

Income Tax, Policy [Policy Text Block]

Income Taxes

Income taxes are accounted for in accordance with the provisions of ASC Topic 740, Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized, but no less than quarterly.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

The Company’s reporting currency is U.S. Dollars. The functional currency of the Company’s Subsidiary in the United Kingdom is British Pounds. The translation from British Pounds to U.S. Dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using the average exchange rate in effect during the period. The resulting translation adjustments are recorded as a component of Accumulated Other Comprehensive Income (Loss). Foreign currency translation gains and losses arising from exchange rate fluctuation on transactions denominated in a currency other than the functional currency are included in the unaudited condensed consolidated statements of operations. 

Research and Development Expense, Policy [Policy Text Block]

Software Development Costs

Costs incurred in the research and development of software products and significant upgrades and enhancements thereto during the preliminary project stage and the post-implementation operation stage are expensed as incurred. Costs incurred for maintenance and relatively minor upgrades and enhancements are expensed as incurred. Costs associated with the application development stage of new software products and significant upgrades and enhancements thereto are capitalized when 1) management implicitly or explicitly authorizes and commits to funding a software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended. The Company capitalized internal-use software development costs of $368,041 during the six-months ended June 30, 2015. The Company amortizes such costs once the new software products and significant upgrades and enhancements are completed. The unamortized internal-use software development costs amounted to $870,634 and $841,724 at June 30, 2015 and December 31, 2014, respectively. The Company’s amortization expenses associated with capitalized software development costs amounted to $175,278 and $339,132 during the three and six-month periods ended June 30, 2015, respectively, and $109,438 and $167,461 during the three and six-month periods ended June 30, 2014, respectively. Amortization of internal-use software is reflected in cost of revenues.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Share-Based Payment

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation, or ASC 718. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

The Company has elected to use the BSM option-pricing model to estimate the fair value of its options, which incorporates various subjective assumptions including volatility, risk-free interest rate, expected life, and dividend yield to calculate the fair value of stock option awards. Compensation expense recognized in the statements of operations is based on awards ultimately expected to vest and reflects estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Segment Reporting, Policy [Policy Text Block]

Segment Reporting

The Company generated revenues from one source, its SaaS business, during the three and six-month periods ended June 30, 2015 and 2014. The Company's chief operating decision maker evaluates the performance of the Company based upon revenues and expenses by functional areas as disclosed in the Company's statements of operations.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

Recent accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company. 

Earnings Per Share, Policy [Policy Text Block]

Basic and Diluted Earnings Per Share

Basic earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period. Dilutive common share equivalents consist of shares issuable upon the exercise of stock options and warrants (calculated using the modified-treasury stock method).

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Numerator:
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Denominator:
Denominator for basic earnings per share--weighted average shares		62,835,140			60,026,430			62,833,091			59,401,930
Effect of dilutive securities- when applicable:
Stock options		-			-			-			-
Warrants		-			-			-			-
Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions		62,835,140			60,026,430			62,833,091			59,401,930
Loss per share:
Basic	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Diluted	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Weighted-average anti-dilutive common share equivalents		15,159,042			15,544,549			17,443,244			15,822,329

Property, Plant and Equipment, Policy [Policy Text Block]

 

Property and Equipment

Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives of three years. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized

Property and equipment consist of the following at:

	June 30, 2015			December 31, 2014
Internal use software costs	$	1,657,408		$	1,289,367
Computer equipment and software		582,000			476,963
Office furniture and equipment		224,579			187,263
Leasehold improvements		308,748			298,067
		2,772,735			2,251,660
Accumulated depreciation		(1,322,431	)		(826,802	)
	$	1,450,304		$	1,424,858

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Depreciation expense	$	83,996	$	45,137	$	156,498	$	77,484
Amortization expense on internal software	$	175,278	$	109,438	$	339,132	$	167,461

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 11, 2015
Entity Registrant Name	ACCELERIZE INC.
Entity Central Index Key	0001352952
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		62,914,540
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Note 2 - Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2015

Depreciation Expense [Member]

Notes Tables

Property, Plant and Equipment [Table Text Block]

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Depreciation expense	$	83,996	$	45,137	$	156,498	$	77,484
Amortization expense on internal software	$	175,278	$	109,438	$	339,132	$	167,461

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	June 30, 2015		December 31, 2014
Allowance for doubtful accounts	$	5,364	$	212,113

Schedule of Accrued Liabilities [Table Text Block]

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Advertising expense	$	83,586	$	87,099	$	235,083	$	119,310

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Numerator:
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Denominator:
Denominator for basic earnings per share--weighted average shares		62,835,140			60,026,430			62,833,091			59,401,930
Effect of dilutive securities- when applicable:
Stock options		-			-			-			-
Warrants		-			-			-			-
Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions		62,835,140			60,026,430			62,833,091			59,401,930
Loss per share:
Basic	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Diluted	$	(0.03	)	$	(0.01	)	$	(0.05	)	$	(0.02	)
Weighted-average anti-dilutive common share equivalents		15,159,042			15,544,549			17,443,244			15,822,329

Property, Plant and Equipment [Table Text Block]

	June 30, 2015			December 31, 2014
Internal use software costs	$	1,657,408		$	1,289,367
Computer equipment and software		582,000			476,963
Office furniture and equipment		224,579			187,263
Leasehold improvements		308,748			298,067
		2,772,735			2,251,660
Accumulated depreciation		(1,322,431	)		(826,802	)
	$	1,450,304		$	1,424,858

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Unaudited Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:	$ 5,465,824	$ 3,906,409	$ 10,665,486	$ 7,333,606
Cost of revenue	1,591,345	1,049,668	2,909,111	1,838,767
Gross profit	3,874,479	2,856,741	7,756,375	5,494,839
Operating expenses:
Research and development	1,326,410	600,259	2,201,792	1,177,045
Sales and marketing	1,915,053	1,400,559	4,048,977	3,023,008
General and administrative	2,351,430	1,567,342	4,805,876	2,370,510
Total operating expenses	5,592,893	3,568,160	11,056,645	6,570,563
Operating loss	(1,718,414)	(711,419)	(3,300,270)	(1,075,724)
Other income (expense):
Interest income	21,387	7,044	54,365	7,044
Interest expense	(62,893)	(2,112)	(108,237)	(5,421)
Total other (expenses)	(41,506)	4,932	(53,872)	1,623
Net loss	$ (1,759,920)	$ (706,487)	$ (3,354,142)	$ (1,074,101)
Loss per share:
Basic (in dollars per share)	$ (0.03)	$ (0.01)	$ (0.05)	$ (0.02)
Diluted (in dollars per share)	$ (0.03)	$ (0.01)	$ (0.05)	$ (0.02)
Basic weighted average common shares outstanding (in shares)	62,835,140	60,026,430	62,833,091	59,401,930
Diluted weighted average common shares outstanding (in shares)	62,835,140	60,026,430	62,833,091	59,401,930

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Note 6 - Line of Credit

6 Months Ended

Jun. 30, 2015

Line of Credit [Member]

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 6: LINE OF CREDIT

On September 30, 2014, the Company entered into an amendment of its line of credit, or the Line of Credit, with Square 1 Bank, or the Lender, to borrow up to a maximum of $6,000,000 at the Company’s discretion, an increase from up to $3,000,000 that the Company was permitted to borrow under the original Line of Credit entered into on March 17, 2014. Amounts borrowed will accrue interest at the prime rate in effect from time to time plus 1.25%, not to be less than 5.5% per annum, provided that in no event shall the accrued interest payable with respect to any month be less than $10,000. Accrued interest on amounts borrowed is payable monthly and all other amounts borrowed will be payable in full on the maturity date of March 17, 2016, which maturity date may be extended to March 17, 2017 if the Company provides the Lender with a fully-funded business plan acceptable to the Lender by January 15, 2016 and no event of default has occurred. The Line of Credit may be earlier terminated without a prepayment fee.

The Line of Credit, as amended, contains covenants including, but not limited to, covenants to achieve specified Adjusted EBITDA levels, as defined, and customer renewal levels, limiting capital expenditures, requiring minimum liquidity and restricting the Company’s ability to pay dividends, purchase and sell assets outside the ordinary course and incur additional indebtedness. As of June 30, 2015, the Company was in compliance with these covenants. The occurrence of a material adverse change, as defined, will be an event of default under the Line of Credit, in addition to other customary events of default. The Company granted the Lender a security interest in all of the Company’s personal property and intellectual property.

On June 24, 2015, the Company entered into an amendment of the Line of Credit with the Lender, effective until September 1, 2015, which provides an Advance Rate increase, from 3.00 to 3.25, in the Credit Limit calculation. Additionally, the minimum liquidity covenant of $1,000,000 was removed.

As of June 30, 2015, the Company was in compliance with all covenants. The occurrence of a material adverse change, as defined, will be an event of default under the Line of Credit, in addition to other customary events of default. The Company granted the Lender a security interest in all of the Company’s personal property and intellectual property.

The Company borrowed $1,600,000 from the Line of Credit during the six-month period ended June 30, 2015. The Company owed $4,500,000 under the Line of Credit at June 30, 2015. The interest rate for the amount borrowed was 5.5% per annum.

In connection with the original Line of Credit, the Company issued to the Lender a warrant to purchase up to 46,875 shares of the Company's Common Stock at an exercise price of $1.60 per share. The warrant expires on March 17, 2017. The fair value of the warrant amounted to $32,067. On March 27, 2015, in connection with an obligation under the Line of Credit when borrowings thereunder exceed $3,000,000, the Company issued to the Lender a warrant to purchase 58,824 shares of the Company’s Common Stock at an exercise price of $1.53 per share. This warrant expires on March 27, 2018. The fair value of the warrant amounted to $37,289.

Additionally, the Company paid $1,200 to the Lender in financing costs. The fair value of the warrants as well as the financing costs not expensed, which amounted to $1,500, were capitalized as deferred financing costs at June 30, 2015. The Company recognized amortization and interest expenses in connection with the line of credit for the three and six-month periods ended June 30, 2015 and 2014 as follows.

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Amortization expense associated with line of credit	$	11,033	$	1,358	$	18,583	$	4,667
Interest expense associated with line of credit	$	50,845	$	-	$	88,300	$	-

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Note 5 - Deferred Revenues

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Deferred Revenue Disclosure [Text Block]

NOTE 5: DEFERRED REVENUES

The Company’s deferred revenues consist of prepayments made by certain of the Company’s customers and undelivered implementation and training fees.  The Company decreases the deferred revenues by the amount of the services it renders to such clients when provided.

	June 30, 2015		December 31, 2014
Deferred revenues	$	57,134	$	206,475

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Note 9 - Segments (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
United States		72	%		76	%		73	%		79	%
Europe		19	%		16	%		19	%		15	%
Other		9	%		8	%		8	%		6	%

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Note 5 - Deferred Revenues (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Deferred Revenue, by Arrangement, Disclosure [Table Text Block]

	June 30, 2015		December 31, 2014
Deferred revenues	$	57,134	$	206,475

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Note 9 - Segments

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 9: SEGMENTS

The Company operates in one business segment. Percentages of sales by geographic region for the three and six-month periods ended June 30, 2015 and 2014 were approximately as follows:

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
United States		72	%		76	%		73	%		79	%
Europe		19	%		16	%		19	%		15	%
Other		9	%		8	%		8	%		6	%

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Note 7 - Stockholders' Equity

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE 7: STOCKHOLDERS’ EQUITY

Common Stock

During the six-month periods ended June 30, 2015 and 2014, the Company generated proceeds of $9,586 and $571,219 from the exercise of 11,457 options and 1,632,051 warrants, respectively.

During the six-month period ended June 30, 2015 the Company issued 9,340 shares of its Common Stock pursuant to the cashless exercise of 21,458 options. During the six-month period ended June 30, 2014, the Company issued 50,390 and 538,542 shares of its Common Stock pursuant to the cashless exercise of 79,158 options and 626,250 warrants respectively.   

Warrants

During the six-month period ended June 30, 2015, the Company issued 58,824 warrants to the Lender. The warrants are exercisable at the price of $1.53 per share and expire on March 27, 2018. The fair value of these warrants which amounted to $37,289, has been recognized as deferred financing fees and is amortized using the effective interest method over the terms of the associated Line of Credit.

The fair value of the warrants granted during the six-month period ended June 30, 2015 is based on the BSM model using the following assumptions:

Effective Exercise price	$	1.60
Effective Market price	$	1.60
Volatility		64	%
Risk-free interest		0.9	%
Term (years)		3
Expected dividend rate		0	%

During the three and six-month periods ended June 30, 2015, the Company recorded expenses of $284,093 and $568,186, respectively, related to warrants granted to employees in prior years. The Company recorded no such expenses in 2014.

 

Stock Option Plan

The Company has a Stock Option Plan, or the Plan, under which the total number of shares of capital stock of the Company that may be subject to options under the Plan is currently 22,500,000 shares of Common Stock from either authorized but unissued shares or treasury shares. The individuals who are eligible to receive option grants under the Plan are employees, directors and other individuals who render services to the management, operation or development of the Company or its subsidiaries and who have contributed or may be expected to contribute to the success of the Company or a subsidiary. Every option granted under the Plan shall be evidenced by a written stock option agreement in such form as the Board shall approve from time to time, specifying the number of shares of Common Stock that may be purchased pursuant to the option, the time or times at which the option shall become exercisable in whole or in part, whether the option is intended to be an incentive stock option or a non-incentive stock option, and such other terms and conditions as the Board shall approve.

The share-based payment is based on the fair value of the outstanding options amortized over the requisite period of service for option holders, which is generally the vesting period of the options. The fair value of the options granted during the six-month periods ended June 30, 2015 and 2014 is based on the BSM model using the following assumptions:

	June 30, 2015				June 30, 2014
Effective exercise price	$	1.40	-	1.43	$	1.43	-	1.80
Effective market price	$	1.40	-	1.43	$	1.43	-	1.80
Volatility		61	-	62%			64%
Risk-free interest		0.9	-	1.0%			0.9%
Terms (years)		2	-	4			4
Expected dividend rate			0%				0%

The Company generally recognizes its share-based payment over the vesting terms of the underlying options.

	Six-month periods ended
	June 30, 2015		June 30, 2014
Weighted-average grant date fair value	$	0.52	$	1.51
Fair value of options, recognized as selling, general, and administrative expenses	$	558,430	$	287,985
Number of options granted		390,000		1,017,500

The total compensation cost related to non-vested awards not yet recognized amounted to approximately $1,676,874 at June 30, 2015 and the Company expects that it will be recognized over the following weighted-average period of 48 months.

If any options granted under the Plan expire or terminate without having been exercised or cease to be exercisable, such options will be available again under the Plan. All employees of the Company and its subsidiaries are eligible to receive incentive stock options and non-qualified stock options. Non-employee directors and outside consultants who provided bona-fide services not in connection with the offer or sale of securities in a capital raising transaction are eligible to receive non-qualified stock options. Incentive stock options may not be granted below their fair market value at the time of grant or, if to an individual who beneficially owns more than 10% of the total combined voting power of all stock classes of the Company or a subsidiary, the option price may not be less than 110% of the fair value of the Common Stock at the time of grant. The expiration date of an incentive stock option may not be longer than ten years from the date of grant. Option holders, or their representatives, may exercise their vested options up to three months after their employment termination or one year after their death or permanent and total disability. The Plan provides for adjustments upon changes in capitalization.

The Company’s policy is to issue shares pursuant to the exercise of stock options from its available authorized but unissued shares of Common Stock. It does not issue shares pursuant to the exercise of stock options from its treasury shares.

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Note 8 - Comprehensive (Loss) Income

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

NOTE 8: COMPREHENSIVE LOSS

Comprehensive (loss) income includes changes in equity related to foreign currency translation adjustments. The following table sets forth the reconciliation from net (loss) income to comprehensive (loss) income for the three and six-month periods ended June 30, 2015 and 2014:

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Net loss	$	(1,759,920	)	$	(706,487	)	$	(3,354,142	)	$	(1,074,101	)
Other comprehensive income (loss):
Foreign currency translation adjustment		8,571			1,069			2,028			2,399
Comprehensive loss	$	(1,751,349	)	$	(705,418	)	$	(3,352,114	)	$	(1,071,702	)

12

The following table sets forth the balance in accumulated other comprehensive loss as of June 30, 2015 and December 31, 2014, respectively: 

	June 30,			December 31,
	2015			2014
Accumulated other comprehensive income	$	(8,943	)	$	(10,971	)

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Note 10 - Commitments and Subsequent Events

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Commitments And Subsequent Events [Text Block]

NOTE 10: COMMITMENTS AND SUBSEQUENT EVENTS

During January 2014, the Company entered into a four year lease for certain office space in Newport Beach, effective February 1, 2014. Under the terms of the lease, the Company initially pays monthly base rent of approximately $22,000 increasing incrementally to approximately $25,000.

During May 2014, the Company entered into a two year sublease in Newport Beach, effective May 1, 2014. The Company initially pays monthly base rent of approximately $10,000 per month, increasing to approximately $11,000 per month by the end of the lease term.

During July 2014, the Company entered into a five year lease for certain office space in a business center in London, England, which commenced on July 30, 2014. The base rent is GBP 89,667 per year and the estimated service charges for the lease are GBP 45,658 per year. The Company will pay an estimated GBP 60,000 for furniture, cabling and build out of the office space.

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Note 7 - Stockholders' Equity (Details Textual) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 27, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Warrant [Member]
Allocated Share-based Compensation Expense		$ 284,093	$ 0	$ 568,186	$ 0
Line of Credit [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	58,824	58,824		58,824
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.53	$ 1.53		$ 1.53
Warrants Issued Fair Value Disclosure	$ 37,289			$ 37,289
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		22,500,000		22,500,000
Proceeds from Warrant Exercises				$ 9,586	$ 571,219
Class of Warrant or Right, Exercise of Warrants				11,457	1,632,051
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period				9,340	50,390
Cashless Exercise Of Options				21,458	79,158
Stock Issued During Period Shares Warrants Exercised					538,542
Cashless Exercise Of Warrants					626,250
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 1,676,874		$ 1,676,874
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition				4 years

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Note 7 - Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule Of Share Based Payment Award Warrants Valuation Assumptions [Table Text Block]

Effective Exercise price	$	1.60
Effective Market price	$	1.60
Volatility		64	%
Risk-free interest		0.9	%
Term (years)		3
Expected dividend rate		0	%

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	June 30, 2015				June 30, 2014
Effective exercise price	$	1.40	-	1.43	$	1.43	-	1.80
Effective market price	$	1.40	-	1.43	$	1.43	-	1.80
Volatility		61	-	62%			64%
Risk-free interest		0.9	-	1.0%			0.9%
Terms (years)		2	-	4			4
Expected dividend rate			0%				0%

Note Payable Repayments [Table Text Block]

	Six-month periods ended
	June 30, 2015		June 30, 2014
Weighted-average grant date fair value	$	0.52	$	1.51
Fair value of options, recognized as selling, general, and administrative expenses	$	558,430	$	287,985
Number of options granted		390,000		1,017,500

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Note 2 - Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Advertising expense	$ 83,586	$ 87,099	$ 235,083	$ 119,310

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Note 9 - Segments - Sales by Geographic Region (Details) - Sales Revenue, Segment [Member] - Geographic Concentration Risk [Member]	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
UNITED STATES
Sales	72.00%	76.00%	73.00%	79.00%
Europe [Member]
Sales	19.00%	16.00%	19.00%	15.00%
Other [Member]
Sales	9.00%	8.00%	8.00%	6.00%

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Unaudited Consolidated Statements of Comprehensive Loss - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net loss	$ (1,759,920)	$ (706,487)	$ (3,354,142)	$ (1,074,101)
Foreign currency translation gain	8,571	1,069	2,028	2,399
Total other comprehensive gain	8,571	1,069	2,028	2,399
Comprehensive loss	$ (1,751,349)	$ (705,418)	$ (3,352,114)	$ (1,071,702)

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Note 4 - Customer Relationships

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE 4: CUSTOMER RELATIONSHIPS

During November 2013, the Company completed its acquisition of certain customer relationships of a former competitor. Pursuant to the acquisition, the Company paid $1 million payable in four installments of $250,000 every quarter, beginning March 2014. The Company paid the final installment of $250,000 in December 2014 and has no outstanding balance under this arrangement. The Company has capitalized the acquisition cost, which approximates fair value of the customer relationships, which amounts to $1,000,000 as is fully amortized at June 30, 2015. The Company amortizes such customer relationships over a period of 18 months. The Company incurred amortization expense related to the customer relationships of $129,631 and $296,296 during the three and six-month periods ended June 30, 2015, respectively and $166,667 and $333,334 during the three and six-month periods ended June 30, 2014, respectively.

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Note 2 - Summary of Significant Accounting Policies - Basic and Diluted Earnings Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net loss	$ (1,759,920)	$ (706,487)	$ (3,354,142)	$ (1,074,101)
Denominator for basic earnings per share--weighted average shares (in shares)	62,835,140	60,026,430	62,833,091	59,401,930
Effect of dilutive securities- when applicable:
Denominator for diluted earnings per share--adjusted weighted-average shares and assumed conversions (in shares)	62,835,140	60,026,430	62,833,091	59,401,930
Loss per share:
Basic (in dollars per share)	$ (0.03)	$ (0.01)	$ (0.05)	$ (0.02)
Diluted (in dollars per share)	$ (0.03)	$ (0.01)	$ (0.05)	$ (0.02)
Weighted-average anti-dilutive common share equivalents (in shares)	15,159,042	15,544,549	17,443,244	15,822,329

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Note 8 - Comprehensive (Loss) Income - Reconciliation from Net (Loss) Income to Comprehensive (Loss) Income (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net loss	$ (1,759,920)	$ (706,487)	$ (3,354,142)	$ (1,074,101)
Other comprehensive income (loss):
Foreign currency translation adjustment	8,571	1,069	2,028	2,399
Comprehensive loss	$ (1,751,349)	$ (705,418)	$ (3,352,114)	$ (1,071,702)

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Note 6 - Line of Credit (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Interest and Amortization Expense Line of Credit [Table Text Block]

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Amortization expense associated with line of credit	$	11,033	$	1,358	$	18,583	$	4,667
Interest expense associated with line of credit	$	50,845	$	-	$	88,300	$	-